Wednesday, May 13, 2015

Minnesota School District Transportation Funding

In 1997 Minnesota moved from a categorical funding structure for school transportation to incorporating transportation revenue in to the general education revenue. In 1997 the legislature attributed 4.85% of the general education revenue to transportation spending. To even the disparity between the rural and metro areas the legislature also included a transportation sparsity index to account for square miles of district and the number of pupils in the district.
Transportation Sparsity Allowance = (Basic Formula Allowance x 0.1469) x (sparsity index^0.26) x (density index ^ 0.13) – (Basic Formula Allowance x 0.485)

Where: Sparsity Index = greater of: (0.2) or (square miles of district / Adjusted pupil units)
And; Density Index = square miles of district/adjusted pupil units
                *not less than 0.005 or more than 0.2
                Transportation Revenue = Transportation Sparsity Allowance x Adjusted Pupil Units

Adjusted Pupil Units: is weighted average of students served in district (half-day kindergarten is 0.55, full-day kindergarten and elementary is 1.0 and secondary students are 1.2).

                The current funding mechanism has come under some criticism in a recent Star Tribune article, which highlighted the disparities existing in the school transportation funding structure in regards to the rural school districts with the greatest square mileage compared to the metro. In aggregate, the general revenue education funds dedicated for transportation equal approximately $30 million surplus. According to the Star Tribune a total of 189 districts have a $23 million transportation deficit. Districts with this deficit are forced to divert funds out of their general education revenue in order to cover the excess transportation costs. This article confirmed the findings of 2010 report from the progressive Minnesota think tank Minnesota2020 where they outline the disparities in the rural areas and highlighted the choices superintendents are forced to make in order to fund their transportation systems.
                Earlier in the legislative session a bill to amend the transportation sparsity allowance in order to divert more money to the school districts that travel the greatest amount of miles. Currently, the bill is stalled in the finance committee.
                Iowa is in a similar situation as Minnesota in underfunding the most rural areas. Currently the Iowa School Broad Association is lobbying this year’s state legislature to create a formula that would create a more equitable distribution in transportation finances. Contrary to Minnesota and Iowa, Wisconsin using a categorical funding structure to reimburse school districts for their transportation expenses. Wisconsin has a tiered rate based on miles from school:
Over 2 to 5 miles  = $35/pupil
Over 5 to 8 miles  = $55/pupil
Over 8 to 12 miles  = $110/pupil
Over 12 miles       =    $275/pupil
Wisconsin’s categorical funding structure based on tiered rates creates an equitable allocation of transportation funds to all the school districts in the state. For a breakdown of state-by-state transportation funding and other school finances visit this school finance blog written education professor Deborah A. Verstegen, Ph.D .

                Minnesota should revisit their school transportation funding structure in order to ensure equity among school districts in the state.

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